Trump adviser ties Amazon criticism to US Supreme Court case

Sean Reid
April 2, 2018

President Trump continues to take shots at Amazon, in Twitter posts on Thursday, in which he accused Amazon of paying "little or no state taxes", and of using the USPS as their "Delivery Boy".

Trump re-opened debate on two of those issues in a tweet Thursday. A report released March 26 by the left-leaning Institute on Taxation and Economic Policy said Amazon either doesn't collect and remit local sales tax or is charging a lower sales tax rate than traditional retailers in seven states: Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania. Trump has repeatedly attacked Amazon Chief Executive Jeff Bezos, who also holds the Washington Post, a publication that is quite critical of the President's administration. The president would love to clip CEO Jeff Bezos wings. Is it causing the U.S. Postal Service to bleed money?

"Amazon doesn't collect sales taxes on goods sold by third-party affiliates, unless it is contracted to do so by those sellers", the official said. Not only is Amazon a highly innovative company, but it helps other companies be productive - especially third-party resellers. Now the company charges sales taxes in the 45 states that have them and the District of Columbia.

In other words, the changes being called for by Trump to shipping policies may actually be more damaging to Amazon than to the distressed Postal Service, which handles some 40% of the tech giant's shipping, according to a study cited by The New York Times. A 2016 report found that Amazon got at least $613 million in subsidies from local governments for its package facilities from 2005 to 2014, plus another $147 million for its data centers.

But despite Amazon's seemingly inexorable growth - including its buildup in groceries, entertainment and health care - there's very little the president or the federal government could do under current antitrust practices.

Even with those powers, Trump's ability to act has limits.

The other prong to Trump's criticism concerns the U.S. Postal Service. At one point, he referred to the paper as "Amazon Washington Post". The US president pointed out that Amazon does not pay enough taxes, hurts traders, and receives an unfair advantage at the back of the US Post Office. The Post Office lost $2.7 billion past year, but "Shipping and packages were a rare bright spot for USPS in 2017, one of two sub-categories of mail for which revenue increased, rather than declined", according to Quartz. In a letter in July to The Wall Street Journal, Corbett wrote that the Postal Service's "competitive package products, including those that we deliver for Amazon" are legally required to cover the costs incurred.

In his tweet, Trump also took aim at the company's use of the postal service is "causing tremendous loss", but that too is misleading.

To comply with federal law, the Postal Service in 2017 had to generate at least $1.6 billion in income from its "competitive nonpostal services", which includes Amazon package deliveries. Led by former Obama Administration press secretary Jay Carney, Amazon's D.C. unit previous year deployed 30 in-house lobbyists.

Though it's unclear how much of a boon, if any, Amazon has turned out to be, the postal service is better off today than it was before.

There has been talk in Washington of taxing online commerce more.

Amazon is one of the biggest companies in the world, and its financials are fair game for critics, but Trump's distortions don't add up and are worthy of Three Pinocchios.

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